Heart-RhythmRumors and speculation have been around for years that Congress will increase the Medicaid look-back period. Now, some events have made those rumors more than just speculation, but it still may not happen. To know if this will affect you, you need to know what the look-back period means.

The “Look-Back” period is the time period in which the government is allowed to review your finances to see if you qualify for Medicaid benefits. Medicaid is the one government program that pays for your nursing home care if you cannot do so. You must be “poor” enough to qualify for Medicaid and you cannot have “artificially” made yourself “poor” within the five year period prior to applying for Medicaid. You can spend your money as you see fit, but giving money away within the look-back period will disqualify you from getting Medicaid benefits.

The look-back period was set at three years in 1993, but was increased to five years in 2006. The longer look-back period makes it harder to plan ahead and protect assets from the costs of nursing home care. An increase would make it even harder to take action unless it were taken sooner than most people want to do so.

Now, a report out of the Congressional Budget Office contains a suggestion to increase the Medicaid eligibility look-back period to 10 years. This item is in a list of suggestions for reducing the Federal budget. It is not in any bill at this time, and may not ever get into a bill or budget. But, since it is now in writing somewhere, the rumors are flying that it is true and is going to happen. Unless it is put into a bill, it is just a suggested option.

There is also a proposal by CMS (the Medicare and Medicaid) office to have a 10 year look-back period for auditing cases of improper payments. This mostly applies to vendors such as hospitals and nursing homes, and is strictly an audit and review measure. It has nothing to do with the look-back period for Medicaid eligibility. But this proposal may be another source of the 10-year rumor.

So, for now the Medicaid eligibility look-back period is still five years. If you or a loved-one needs to apply for Medicaid (or may need to sometime soon) then this issue is important to you. If you want to preserve assets for your children and take advantage of the Medicaid program, then you need to plan well in advance under the current rules. Any increase in the look-back period would increase the time in which you would need to plan ahead. You should contact your Member of Congress if you feel strongly about this matter.